Chief Justice john Roberts recently released a new report that shows that consumer and corporate bankruptcy filings rates are the lowest they have been in about a decade. As you might imagine, the reasons why are varied.
Statistics available in 2010, while America was still suffering in the Great Recession, show that 1.6 million bankruptcy petitions were filed, 1.53 million of which were consumer bankruptcies.
Fewer bankruptcies could be the result of a process that is too expensive for some to consider, and otherwise interested filers may not have enough assets to protect. A 2017 study estimated that the average cost of a Chapter 7 bankruptcy is around $1,200 and around $3,200 for Chapter 13.
The decrease could also be the result of the Affordable Care Act, which provided health care insurance coverage for Americans who did not have any or adequate insurance before. Increased coverage means fewer people need to wipe out medical debt through bankruptcy.
Another potential reason for the decline could be the rise of student debt. Americans now owe $1.5 trillion in student loan debt. Students are saddled with astronomical debt before they even find their first job, which makes it harder for them to obtain other forms of credit that they could discharge in a bankruptcy.
American jobs seem to rise with every monthly jobs report, so it is possible bankruptcies will increase as more people return to work and take on more credit.